That aside, Cisco needs major acquisitions to kickstart its annual growth which has been languishing at eight per cent for two years. Its CEO John Chambers has said Cisco needs to snap up a key player to change things. Yet NetApp faces its own growth challenges: analysts say the storage biz will grow between one and eight per cent annually through 2017.

How would buying a company with such a sales expansion rate meaningfully boost Cisco's own growth? Financially it doesn't look a good transaction.

Assuming that Cisco could get over that point, why would a NetApp purchase be a good idea?

First of all there is no other storage company of such a stature theoretically in play. EMC is capitalised at $52bn whereas NetApp's market valuation is $11.82bn. That is because NetApp's stock price has fallen from a high of $60.60 in early 2011 to $32.99 today. That has made NetApp more affordable but also reflects general investor sentiment that NetApp is not growing as fast as EMC. A NetApp purchase by Cisco would be second best after EMC.

NetApp growth is constrained by the maturity of its capable and very well-respected Data ONTAP operating system. It takes years for this to develop in any significant way, witness - and all the NetApp folks will groan here - the length of time it has taken to add clustering.

Just look at what's going on in your data centre racks

Enterprise storage is facing three massive changes; server flash, cloud storage, and massive unstructured data storage - or Big Data if we're throwing around buzzwords. NetApp is responding to these three things in ways that will keep its ONTAP storage arrays front and centre in enterprises. The era of the single scale-up or scale-out unified block, file and object array is drawing to a close, destroyed by a blizzard of much better point products.

Networked all-flash arrays kill hard drive arrays in terms of storage IOPS and lower latency, even flash-accelerated disk arrays. The era of NAND flash is drawing to a close with replacement non-volatile solid-state memory in the wings, using phase-change memory or a resistive RAM such as HP's memristor. Increasingly, hot data will move out of disk arrays into networked solid-state storage and servers with storage-class memory.

Massive unstructured data stores cannot use file or block disk drive array technology because RAID rebuild times kill performance as the number of spindles and the number of gigabytes squeezed into drives increase. The largest disk arrays will be in a continuous RAID rebuild state if things carry on as they are. There has to be a switch over to erasure coding or object storage technology to get out of this trap. NetApp has its Storage Grid product, using Bycast object technology, but it is not a prominent player in this section of the market, and it may prefer to integrate the technology into ONTAP, committing it to another multi-year development effort.

The cloud storage market is composed broadly of three segments: Amazon-class public clouds, second-tier public clouds, and enterprise private clouds. And perhaps all the public clouds will be forced to move to erasure coding and object storage technology to avoid the RAID rebuild trap. Private clouds that continue to use existing disk array technology may face a cost disadvantage compared to public clouds.

Servers and storage

It's becoming a truism that servers will get more direct-attached storage (DAS) as away of cutting network latency, and more flash storage as a way of cutting access latency. For server suppliers the idea of converging network, storage and server technologies into easy-to-buy, easy-to-manage systems sounds like selling a boatload more servers.

Servers exist to chew through applications as fast as possible while not needing a nuclear power station per data centre to supply the electricity needed. The Cisco-NetApp Flexpod idea is a halfway house to this, giving Cisco an in-road to NetApp accounts and NetApp a stick to beat EMC's VCE and VSPEX with.

But applications are beginning to move to machines with a lot of DAS and, in some cases, to storage arrays with excess server engines in them. NetApp is nowhere in this area. EMC is pushing the idea of apps running in its arrays; so too is DataDirect Networks.

Cisco's storage growth possibilities

Cisco acquisition strategists should take a long hard look at the storage and server markets and come to a few conclusions:

The traditional block and file array is an obstacle to servers running more applications faster.

The cloud and big unstructured data both demand a RAID follow-on technology and NetApp is lagging in this area.

Servers will need large non-volatile storage-class memory and NetApp is a laggard in this area.

Servers will need networked all-flash arrays for shared access to hot data and NetApp has catch-up efforts ongoing in the shape of the Mars project, but it is behind startups including Greenbytes, Pure Storage, Violin Memory and Whiptail, and has an ONTAP integration issue to deal with.

The El Reg storage desk thinks Cisco would be better served by spending its acquisition cash on Citrix and Rackspace, and not on a single large storage company purchase. If it wants to get into storage then it should buy strong point products that can be brought together to build a coherent storage portfolio with high growth prospects, such as:

A supplier of servers with direct-attached flash storage.

A compatible networked all-flash array supplier.

A big data and cloud storage technology supplier that can do erasure coding and object storage.

A NetApp purchase would be a retrograde step for Cisco and one that only short-term financial analysts who love takeovers and raised shared prices would encourage. To the Cisco board, don't do it: you'll be wasting your money. ®